DRL plans high-margin drugs for India, Europe

HYDERABAD: DR Reddy’s Laboratories (DRL) is focussing on high-margin speciality drugs and plans to launch biosimilar drugs in India and Europe. The company is also banking on the first-to-file drug launches in the US every year to drive its growth.

DRL managing director and COO Satish Reddy said: “There is a lack of competition and higher margins in biosimilar drugs. We have initiated negotiations with regulators in Europe to launch Grafeel, a drug used to reduce infections in patients with neutropenia.” He, however, said the timeline for the launch of the drug in Europe cannot be given as the approval is on a case-to-case basis.

The company has 60 abbreviated new drug applications (ANDA) with the US Foods and Drugs Administration (USFDA) whose market value is around $60 billion. The company has the first-to-file status in 32 drugs and plans to launch one drug every year.

Pharma majors have been making strategic moves to tap the high-margin segments in regulated markets. Ranbaxy is betting on the 20 first-to-file molecules with a market size of $20 billion. With several generic companies launching the generic drug at the same time, a drug launch even on day one of the patent expiry of a drug yields minimal returns because the price erosions are as high as 99%.

DRL vice-president (Biologics Development) Cartikeya Reddy said: “We have eight drugs at various stages and plan to launch a biosimilar drug in the domestic market every year. The company will invest around $20-30 million to expand our biologics R&D facility.” In the domestic market, the company has already launched two biosimilar drugs. There are about five-six major domestic players who sell biosimilar drugs in the country.

The company is in the lookout for acquisition opportunities in France, Italy, Portugal, Australia, New Zealand and Turkey. It is also planning to scale up its operations in South Africa and Brazil. The company has also initiated preliminary negotiations with Japanese companies for a JV to foray in the country.